Madoff Beaten in Prison

Ponzi Schemer Was Assaulted by Another Inmate in December; Officials Deny Incident

ENLARGE

The Butner federal prison in July. A man who served time with Bernard Madoff there says the financier gave him investment advice.
Associated Press

By

Dionne Searcey And

Amir Efrati

Updated March 18, 2010 12:01 a.m. ET

Bernard Madoff, who is serving a 150-year sentence in North Carolina for running a fraud scheme that cost investors billions of dollars, was physically assaulted by another inmate in December, according to three people familiar with the matter.

After the attack, Mr. Madoff, who pleaded guilty a year ago and was sent to a federal prison in Butner, N.C., was moved on Dec. 18 to the prison's low-security medical center for treatment. At the time, the Bureau of Prisons said that rumors of an assault were false and that Mr. Madoff suffered from dizziness and hypertension.

One of his lawyers, Ira Sorkin, added at the time that Mr. Madoff was experiencing high blood pressure and heart palpitations. Mr. Sorkin declined to comment Wednesday on whether his client was beaten, saying, "I don't comment on prison conditions or his family. That has been my policy."

Mr. Madoff was treated for a broken nose, fractured ribs and cuts to his head and face, according to a felon currently at Butner serving time on drug charges who was familiar with his condition at the time. The details of the injuries couldn't be independently verified.

Another inmate who recently was released from Butner after serving time for drug charges and a third person who isn't an inmate and is familiar with Mr. Madoff's situation both confirmed the assault.

The former inmate said the dispute centered on money the assailant thought he was owed by Mr. Madoff.

The current inmate said Mr. Madoff's assailant was a beefy man serving time for a drug conviction. The alleged assailant's mother said in an interview her son had not mentioned any scuffle with Mr. Madoff but that he had been a body builder and held a black belt in Judo until he was injured in a shooting in 2002. While behind bars he has regained strength and gotten back into shape, she said.

The Bureau of Prisons said it investigated the incident, a process that included an interview with Mr. Madoff.

"In December he told staff he was not assaulted, and an investigation was completed following his statements, which corroborated his statements," said Traci Billingsley, a Bureau of Prisons spokeswoman. "Not one inmate has told staff he was assaulted."

When The Wall Street Journal asked about the alleged assailant, she said the scenario would be "virtually impossible" because that prisoner lived in a different unit from Mr. Madoff, and each unit was locked down at night.

The inmate who currently resides at Butner—as well as former inmates including Kenneth Calvin "K.C." White, whose prison sentence in Butner for bank robbery overlapped with Mr. Madoff's for several weeks this summer—said prisoners of various units interacted throughout the day.

ENLARGE

Bernard Madoff, in an undated booking mug shot, is serving 150 years.
Reuters

The Bureau of Prison's inmate handbook for Butner says inmates can move from one area of the institution to another during the work day if they have a pass, and can leave their units for meals.

It wasn't clear what time of day the alleged incident occurred.

Denise Simmons, a spokeswoman at the Butner prison, said, "We have no knowledge or information to confirm he was assaulted."

Mr. Madoff, 71 years old, has since returned to the medium-security facility where he was originally housed, according to the Bureau of Prisons.

It's not uncommon for prisoners to deny being beaten because they don't want to risk a reputation as a snitch, according to prison experts and prisoner advocates.

High-profile inmates may be at additional risk because other inmates may assume they have money or access to other resources, advocates say.

Life on the Inside

Facts about Federal Correctional Institution Butner Medium 1

The Butner Complex: Includes two medium-security prisons, one low-security prison, a minimum-security prison and a medical facility

Bernard Madoff: Inmate number 61727-054 in Butner Medium I

Location: 30 miles north of Raleigh, N.C.

Population: 786 as of March 11

Rooms: Unlocked, with bunk beds, a desk and a sink

Inmate Jobs: May include landscaping, tutoring or work in a textiles factory

Mr. Madoff, who has served about eight months in the prison, lives in an unlocked cell at the medium-security facility tucked in a wooded area on the outskirts of the town of Butner.

Mr. Madoff spends free time in the prison library on the weekends and often watches movies, including "Lethal Weapon," according to the former inmate. He said he chatted with the admitted Ponzi schemer on Saturdays in the library and asked for financial advice: "He gave me ideas on my index funds."

Mr. Madoff advised him to diversify, saying he should invest in funds that track the S&P 500 index of stocks "where my money would be on all the stocks instead of putting my eggs into one basket," the former inmate said.

He said Mr. Madoff also warned him off of day trading. "I was trying to get into day trading and he's like, 'That's not for you. That's for individuals like me with millions to spare,' " he said.

He described Mr. Madoff as discreet and select in the company he chose to keep behind bars.

The financier often dined with John Mancini, a 56-year-old pharmacist from Wappingers Falls, N.Y., who was sentenced for illegally distributing about five million tablets of the painkiller hydrocodone, the former inmate said. Mr. Mancini's attorney didn't return a call seeking comment.

Fellow prisoners say Mr. Madoff, who is Inmate No. 61727-054 at Butner, has garnered some respect from inmates because of the breadth of his Ponzi scheme. The fraud caused about $20 billion in net losses by thousands of investors.

Since Mr. Madoff's arrest in December 2008, five other individuals have been charged in connection with the fraud. Two have pleaded guilty; the other three have either maintained their innocence or declined to comment. Prosecutors have said there were more alleged co-conspirators in the scheme who worked at the Madoff investment firm.

Separately, prosecutors from the U.S. attorney's office in Manhattan are building tax-fraud cases against Mr. Madoff's brother and two sons, all of whom worked at Mr. Madoff's investment firm, people familiar with the matter have said. Those men have said they had no knowledge of fraud.

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